Major LNG supplier issues dire warning to EU
The biggest US exporter of liquefied natural gas (LNG), Cheniere Energy, has warned that limited supplies worldwide mean this winter could be “really, really tight.”
According to Reuters, Cheniere, which has sent 70% of its output to Europe this year, also said that a resurgence in Chinese LNG demand would exacerbate the energy crisis.
“At the end of the day, what's going to decide how tight the market will be is how cold it is and how government policies, industry rationing work,” Cheniere’s executive vice president for worldwide trading, Corey Grindal, said at a Gastech conference on Thursday.
Grindal noted that for now the current price environment indicates that LNG supplies will continue to go to Europe. Prices, which were $2 per million British thermal units (MMBtu) in 2020, have rocketed 2,750% to $57 per MMBtu in August.
The US has stepped up exports of the fuel to the EU this year, taking advantage of elevated prices in the region.
China has also been supplying leftover LNG to the EU, as its zero-Covid policies are still weighing on domestic demand, according to Bloomberg. Analysts, however, warn that a total Russian gas shutoff would send the EU into an energy crisis that would last multiple winters.
Natural gas deliveries from Russia’s Nord Stream pipeline to the bloc remain cut off indefinitely due to maintenance issues. According to the Kremlin, technical issues with gas deliveries via the pipeline will persist until the West lifts its sanctions on Russia.
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